Landlords – This Got Me a One Day Response!

In 1999 when I got my first buy-to-let property I made the decision that I wasn’t going to let to LHA (Local Housing Allowance) tenants.

The simple reason for this was because, at the time, I heard that if a tenant hadn’t been entitled to any benefits and the rents had been paid to you (the landlord) directly, then you were liable to pay everything back. This made me run a mile and suffice to say I never considered the strategy again.

However, I do now know landlords who run very successful property businesses concentrating on this strategy so I know it works, but it still wasn’t for me; I’ve just concentrated on professional lets.

Until now!

I had a tenant who moved into a property over 12 months ago. Unfortunately their business succumbed to the economic climate and now they have become LHA tenants. As a result of them receiving the allowance directly, they’ve not been passing it on to me so hence have fallen into arrears.

Now, if you do let to such tenants and if they fall into a minimum of two months’ arrears, you can contact the local authority and ask for the rent to be paid directly to you.

This is exactly what I did.

As soon as the tenant was two months in arrears, I called the local authority and they asked me to provide proof that the tenant was in arrears. I said ‘No problem!’ and they said you’d be surprised at how many landlords don’t have such proof readily available.

I opened up Landlords Property Manager, ran the ‘Tenant Payment History’ report and emailed it over to them along with a copy of the AST.

Here is a sample of the report right here…and it was generated at the touch of a button.


This report and my short email managed to initiate a response within 24 hours where the local authority said that they would now be paying the rent directly to me. Result!

Why am I sharing this report with you?

Well I was just seeking some advice from the NLA’s advice line and they said it was the first time they had heard of someone getting such a fast response from the local authority.

I am certain it was down to the documentation I sent them and the Tenant Payment History report,
which shows exactly how the arrears stand with the tenant.

Feel free to re-use this template. If you’re dealing with LHA tenants who decide not to pass on the rents to you, then I hope it gets you as fast a result as it did for me.

Alternatively you can go here to learn more about how our award winning software can make your life easier and help you to get better organised in 2011. This is a sample of just one of the many one-touch reports it generates…


Happy investing
Amer Siddiq

Government Offer Tax Cuts for Buy to Let Investors

The Government is starting to show signs of recognizing that the property market has a major role to play in the recovery of the UK economy. This week we heard news that they are considering granting institutional investors a stamp duty concession in an attempt to lure them into being professional landlords.

This is clearly an attempt to revitalise the property market and is something to be applauded. Furthermore, the decision to try for this particular change came after discussion with property advisors so it is great to see the Government talking to those who really know how this sector works.

The way the proposed changes will work is that instead of the stamp duty being calculated based on bulk buying, it would be bought down to a singular stamp duty fee for each property. In other words, to simplify things, the landlord who buys properties in bulk would be paying the same amount of stamp duty as everyone else. There’s a thought!

This could be an excellent opportunity for landlords who are looking to rapidly expand their portfolio and to do so without attracting ridiculous amounts of stamp duty like they have in the past.

Banks Dispute Immediate Future of Property Market

As previously reported on this blog, Nationwide recently released the results of a survey that clearly indicated we could expect a 10% to 15% rise in property prices in the UK in 2010. Quick as an eye blink, Halifax has taken the wind out of the sails of that good news by releasing their own survey that seems to say almost the opposite.

According to them, the growth we saw in January was around 0.6% down from a six monthly average of 1.1%. This leads them to get fairly gloomy and suggest that perhaps the increase in properties coming to the market will see pressure on prices stifling any rises.

It is true that houses are being bought to market fairly quickly as home owners are galvanized by what looks like a little light at the end of the tunnel. People have been stagnant for a long time now and many of them are desperate to take advantage of any improvement in property prices to sell up and move on.

The closure of the Bank of England’s quantitive easing program is likely to mean that UK base rate stays low for a further fairly prolonged period. The bottom line, however, is that if more properties become available but mortgage lending does not increase then we are likely to see a downward pressure on prices.

Landlord Fined Over Faulty Boiler

One of the many items on the long list of things that landlords must do to secure the safety of their tenants is a regular boiler check. It now seems that failing to make that check can have quite dire consequences.

According to the Health and Safety Executive (HSE), a landlord was fined quite heavily after a boiler they failed to have checked flooded their tenanted property with carbon monoxide. Graham Barnes was ordered to pay nearly £10K in fines and costs for not having the gas appliances of his rental property properly checked.

HSE inspector Dozie Azubike said “the incident was a clear case of a property professional putting people at risk by ignoring his responsibilities. As a result of the boiler not being serviced, carbon monoxide leaked into the kitchen creating a very dangerous environment.”

Under UK law you are required as a landlord to have one gas appliance and boiler check carried out on each of your properties every twelve months. Not doing so can clearly cost you dearly as in the case of Mr Barnes.

I know I have said this before but it is not just the financial risks of ignoring safety legislation we have to worry about. If something did go wrong in one of your properties, causing severe injury or even death, then you would have to live with your conscience. For me, that is the scariest bit of all.

Consumers Supreme Confidence in Property Market

According to figures revealed in a recent survey taken by Rightmove Plc, Brits are confident that UK house prices will extend their gain over the next twelve months.

They say that 53 % of respondents predicted a rise in average house prices. This figure is most interesting when contrasted with figures for the same question a year ago. Only 10% indicated any confidence that there would be a rise in house prices.

There seems to be no doubt that we are on the rebound here in the UK property market, especially if consumer confidence is any measure (and as we know, with the economy, it is often the best measure).

Miles Shipside, director of Rightmove, said in a recent statement:

“Given the looming election and the talk of pending austerity packages ahead, this consumer survey highlights a surprisingly positive property price outlook. Consumers have the impression that we are over the worst of the recent price falls and that there is likely to be upward pressure on prices.”

Let’s hope we are all correct to be so optimistic, though the figures do seem to indicate that the worst of the recession is behind us with unemployment falling at the fastest rate last month since April 2007.

This kind of thing, combined with the low interest rates, is giving people cause to look forward to the future.

Is Skipton Pulling a Fast One?

I think all of us in the property game should be very interested in the goings on with Skipton Building Society this week, even if we do not have a mortgage with them. Just what the heck are they playing at?

It seems that the brains trust at Skipton has dreamed up a new clause for their SVR (Standard Variable Rate) loan. One that pretty much lets them do what they like under ‘exceptional circumstances’. The result is that they have decided to invoke this clause (not sure on what grounds) and bump up their rates on existing loans.

I am sure they have got very good lawyers who have been through this with a fine tooth comb but I am still somewhat incredulous. You have to wonder exactly how clear this tricky clause was made to the customer before they signed on the dotted line and what examples were given to illustrate ‘exceptional circumstances’.

It seems to me they could be treading a very fine legal line. If, however, it is ruled to be all above board, and surely someone must test it, then that is a deep concern. If they set a precedent with this, we could all face rate hikes.

It is certainly something that needs looking at very closely.

Accommodation Shortage Profits the Student Landlord

The boom in demand from student housing has landlords desperately trying to keep up. After a year or so of too many void properties it seems that landlords now cannot fill the demand, and in the student sector this is even more obvious.

In the current academic year, 2.4 million students enrolled in universities; that represents a 34% increase over 10 years.

This unprecedented figure has resulted in fewer voids and has seen an increase in rent. The estimated figure is a return on investment of 7%-10%

There are clearly benefits, then, of renting to a student market. Compared to other buy to let properties, the returns are much higher. It is said that the demand in these areas is only set to rise over the coming years which is another enticing element.

The added bonus is that the way student housing works, the property is tenanted for most of the year and landlords knows seven months in advance if the property is pre-let for the following year.

This kind of thing guarantees income and allows planning for the future which is often lacking in the regular buy to let market. It has to be said that student rentals have a lot going for them and are certainly something to consider, especially if you are interested in property in the big student cities of Manchester, London and Sheffield.

Demand Outstrips Supply for Rental Accommodation

We had the era of reluctant landlords and now it seems that the market is to be flooded with reluctant tenants. Further to yesterdays blog, the ARLA (Association of Residential Letting Agents) has released research which clearly shows the rise in people who are demanding rental accommodation, and a lot of them would rather be in their own homes.

This includes first time buyers, as I outlined yesterday, but also people who were forced to sell up at the height of the recession.

The ARLA is indicating that the situation is such that there is now a good chance demand for rental properties will soon outstrip supply. In fact, they ascertain that this has already started. During Quater Four, 2009, an average of 41% of members surveyed reported more tenants than properties – compared with just 24% last quarter.

A spokesperson for the ARLA had this comment on why this situation is occurring:

“New tenants include those homeowners who were forced to sell their home during the last year either due to financial instability or a job-move. And many people now in a position to buy are struggling to find the right property, as there is also a shortage of both properties for sale and realistic mortgages”

It is great for landlords to be in the driving seat after a very tough year but it is also a situation that the Government must keep an eye on. To not have enough housing for your population is a very serious problem, indeed.

Tenant Boom in UK!

It is shaping up as a great year for landlords as new tenants flood the market says James Davis, chief executive of online letting agent He goes on to add:

“The availability of finance for first-time buyers is still stifling the sales market, meaning would be first-time buyers are being reluctant [to purchase] or forced to rent.”

We all have a lot of sympathy for those people who are struggling to get onto the property ladder. It must be very frustrating especially with the actual price of property being so affordable at the moment. I can foresee a situation where banks finally decide to lend first homeowners money, right at the time of a property price hike, effectively making them much worse in real terms.

The point is, however, that with the attitude the banks have at the moment, a lot of people are unable to purchase their own homes and, of course, they have to live somewhere. This is set to prove a boon for landlords.

There is a bright side as Mr Davies pointed out. Renting is more flexible and at least you know what to budget each month as repairs to things like boilers are issues for the landlord.

From the landlord’s point of view it is great to not have the worry of so many empty properties.

Buy To Let Loan Situation Improving

According to the RLA the tables may be turning when it comes to Buy To Let loans. In fact, the RLA is making the bold claim that landlords may have the upper hand. Wouldn’t that be sweet?

In an article on their website this week the group claims that there has been a noticeable sea change in the attitudes of the financial lenders. They are showing a much greater willingness to entertain the idea of lending to landlords to extend their portfolios.

The RLA go so far as to say that one or two of their institutions are actively seeking out experienced landlords and targeting them with loan products. Apparently, their favourite among landlords is the type that has two or three properties and is looking to expand.

All that said, it is important to point out that the institutions’ focus seems to be very much on landlords that have quite a lot of experience and a proven track record. I guess they can be forgiven for having that attitude after the role that amateur landlords played in the last crisis.

If you fit their criteria though this is potentially very good news for you; with property at a fairly low price still this is your opportunity to grab a bargain. With loan products back on the table it is promising to be a very good year for some lucky landlords and one that they may benefit from for years.